At Least One Analyst Is Confident Chipotle Sales Will Recover

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At a time when Chipotle Mexican Grill, Inc.
CMG
shares are facing investor backlash, SunTrust's Jake Bartlett maintained his Buy rating and $550 price target on the stock, betting that sales will recover at the burrito chain. "Following weak April, it's time to pick the low hanging fruit - 1Q16 results and April trends did not demonstrate a clear sales recovery," Barlett wrote in a note. The analyst said the launch of Chorizo possibly in the second/third quarter, loyalty and technology (delivery with Postmates, improving mobile/online order wait times, and a new app) should help sales recovery. "These initiatives, combined with improving consumer satisfaction scores give us confidence sales will recover," Barlett noted. The company reported a first quarter loss of $0.88 a share, better than BTIG's estimate of a loss of $1.12 a share and consensus loss estimate of $1.06 a share. Revenue decreased 23.4 percent to $834.5 million, and comparable restaurant sales fell 29.7 percent. Meanwhile, BTIG has downgraded the stock to Neutral from Buy on slower sales recovery. JPMorgan's John Ivankoe maintained an Overweight rating for the company, while reducing the price target to $485 from $510. Read more: http://www.benzinga.com/analyst-ratings/analyst-color/16/04/7890632/jpmorgan-cuts-target-on-chipotle-to-485-maintains-overwe#ixzz472E3meWF Shares of Chipotle fell 4.61 percent to $425.37.
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Posted In: Analyst ColorEarningsNewsGuidancePrice TargetReiterationAnalyst Ratings
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